Economics

US manufacturing jobs

Song two

IN THE past year American manufacturers have added almost 200,000 jobs to the payrolls (197,000 from April 2010 to April 2011 to be precise). That's a "terrific increase," writes Mark Doms, chief economist of the Department of Commerce, in his preview of tomorrow's durable-goods report. It didn't sound all that terrific to me, until I checked the numbers. It turns out that no administration has been able to make that claim since President Clinton's in the summer of 1998. The closest we got during the Bush years was the 12 months to October 2004, when American manufacturers added zero workers (see chart below).

Just to be clear: the chart shows the year-on-year change in manufacturing employment, not the level. (A straightfoward chart of the number of people employed in manufacturing looks like this.) It may be that manufacturing layoffs overshot during the Great Recession and that after a brief recovery, employment will resume its decade-long downward trend. Or perhaps the Great Recession hastened the workforce's descent to rock-bottom (reached in December 2009 at 11.5m workers*), and things can only improve from there.

Where have these new jobs been added, exactly? The chart below from Mr Doms and his team shows the job gains and losses in different parts of manufacturing. Housing-related industries, such as furniture, continue to shed workers. But two export-orientated industries--machinery and transportation equipment--added 80,000 jobs between them. And almost 100,000 were added in the metals industry, counting both the primary sector (steel mills, aluminium smelters, etc) and fabricated metals (cans, coating, forging, and so on). It is, writes Mr Doms, "a welcome reminder of the importance of American heavy metal".

*CORRECTION: I notice I put my decimal point in the wrong place in the original post. The text has now been corrected. Perhaps the whole post should be retitled Song 0.2

Now S.C., let's be clear here: Blur's "Song Two" is not what a reasonable man would classify as heavy metal.

Interesting that machinery is a growth sector in the United States. Precision tooling and capital goods industries - especially in the export market - were largely usurped by German firms over the years prior to the crisis. What are the prospects of a return?